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The ultimate guide to writing an e-commerce business plan

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The wonderful world of e-commerce has made it possible to start an online business from the comfort of your spare room.

It’s easier than ever for dreamers to transform into doers – to great success – in literally a few clicks.

There’s a lot to keep track of when you’re running your own business, from managing finances and finding the right employees to sourcing suppliers and beyond.

So having a plan for your online shop is a must if you want to stay on top of it all like a boss.

Think of your business plan as a roadmap for turning your idea for a small business into a big success.

Here’s what we cover in this guide:

What is a business plan?

Why do I need an e-commerce business plan?

How to make an e-commerce business plan that works

How long and thorough should my business plan be?

What you need to include in your business plan

FAQs about e-commerce business plans

Final thoughts – and get your e-commerce business plan template

No matter what industry you are operating in, the definition of a business plan remains the same.

It’s essentially a document that outlines your concept, objectives and strategy for the successful rollout of your business.

It covers things like the size of the opportunity, bookkeeping, start up and running costs, advertising, and so on in enough detail to give your reader a flavour for what you’re doing as an entrepreneur.

Preparing this document allows you to clarify your business goals and gives you the opportunity to identify potential blockers or speedbumps before they become a problem.

Working through the template might even spark some new ideas or solutions you’ve not yet considered, so it’s definitely worth using no matter how much experience you have as an entrepreneur.

Beyond that, a business plan helps you test the viability of your concept, and lays things out in a way that shows you’ve done your homework and are ready to turn your dream into a lucrative reality.

Whether you’re starting a business, looking for funding, or taking your side hustle full time, you need to have a business plan for your e-commerce store ready to go.

You can refer back to this document to clarify strategies, define goals, outline your hiring and supplier needs, and show what kind of funding you need, whether that’s through grants or from investors.

My big motto in life is you leap, and the net will appear. Sometimes it’s only from taking that leap that we see what’s out there. So many people get on the cliff edge thinking about the jump, and it’s a terrifying place.

Sahar Hashemi, Co-Founder at Coffee Republic

Using a business plan template like ours helps new entrepreneurs get over the dreaded ‘fear of the blank page’, which can stop even the best writers in their tracks.

Such templates also offer ready-made and expert-approved guidance on every facet of your business-to-be, so why not take advantage of that and let us help you take the leap?

Get your ideas down on paper, let them flow freely before you organise everything.

Use our free e-commerce business plan template to help you develop those ideas and identify potential issues.

Think about some of your favourite online shops and take the time to really dig into what they do, how they do it, and why you feel it’s effective from the point of view of a customer.

What draws you to your preferred brands, and what is it about their offering that makes you not only hit ‘checkout’, but keep coming back for more?

Take the time to research e-commerce generally before digging into your industry and finding your niche within that.

Your products and brand identity really need to stand out in what can be a highly saturated space at times.

The length of your e-commerce business plan will change depending on the nature of your concept and how expansive your vision is.

For startups, business plans tend to go up to around 10 pages.

Meanwhile, bigger ventures might need to go far beyond that, with detailed data and charts to illustrate key points to potential investors.

Executive summary

This is where you hook whoever is reading your business plan – potential investors, for example –with a brief explanation of your concept.

Write this section last, and make sure it’s no longer than a page. Think of it as an elevator pitch in writing.

Give your reader some context behind the type of product or service you’d like to offer, what your brand represents, and what makes you different from your competition.

Here’s a few questions to ask yourself as you write this section:

  • What kind of products or services will you provide?
  • Who is your ideal customer?
  • Will you be running your business from home, or will you need to rent out a dedicated space?
  • What are your short and long-term goals?
  • How much money do you need from investors?

This is also a great time to talk about your team.

Customers and potential investors are not just buying into your brand. They’re interested in the personalities and experience behind it.

Company description

This is where you go into a bit more detail about who you are and what you want to achieve as a business owner.

The aim of this section is to give some colour to more abstract parts of your brand, such as the main values, principles and kind of culture you want to create.

There are more practical things you can cover here too, such as the way your business is to be structured. Are you going for sole proprietorship, general partnership, or limited company?

Talk about the wider industry you’re operating in, where you fit in, and the nature of your business, including all the products and services it offers.

Include your primary business objectives, both for the short and long term.

You might already be familiar with this acronym, but make sure your goals are SMART: specific, measurable, attainable, realistic and time bound.

Include any additional, relevant information about your current team here, with some notes about any futures hires you might need to make as your business grows, including their experience level and estimated salaries.

Market analysis

No market, no business, it’s as simple as that.

The size of the opportunity needs to be enough to generate the kind of revenue you need to not only survive but thrive.

Once you’ve identified the size and key demographics of your target market, drill down into it and make sure you have all the information you need to inform the rest of your plan and justify your decisions.

The more you know about your market, the more investors will trust you, and the more you will be able to tailor your products to suit your ideal customer.

The great thing you have when you sell online is you can actually target the 60 million-plus customers in the UK with one store, which inventory-wise solves everything. – Julien Callede, Co-Founder at Made.com

Use this research to build your awareness of current industry trends and see what the outlook is for the next five years.

Bear in mind that your market is always evolving, so don’t focus all your energy on having a perfect, 100% complete picture of it at this stage.

What you need is enough data to give you the confidence to take decisions and roll out products that will sell and give value to your market.

Places to look for this data range from government statistics offices to industry organisations and respected news outlets in your sphere.

But don’t be afraid to branch out and use any reliable information you can get your hands on.

Competitor analysis

This is where you showcase your knowledge of the competition and outline how you’re going to differentiate your business from everyone else.

Don’t be afraid to list your direct competitors by name and specify what you’ll do to set yourself apart and win loyal customers.

For example, if you’re selling hand-made and bespoke pottery, you could donate a percentage of profits to a charity that might resonate with you and your audience.

Products and services

While details about your products and services will be woven throughout your business plan – this is what your business is built on, after all – it’s worth dedicating a section to the topic.

Use this space to highlight key details about your offering. And if you have an extensive product line, pick a handful to showcase in detail.

If you’re starting out with just a few choice products, you can afford to really pull out all the stops and give your reader a comprehensive view of each product while keeping things concise.

Marketing

By now, you should have a pretty good idea of what kind of marketing efforts you plan to undertake before and after launch.

Armed with your customer personas, distil all those plans into a brief outline of how you will get the word out and attract your ideal customer.

From Instagram ads and TikTok videos to loyalty cards and print campaigns, create a plan that is manageable with the resource and budget you have, but resonates with your audience and meets them on the platforms they’re visiting.

As you elaborate on your marketing strategy, keep the four Ps in mind and make sure everything coheres in your plan:

  • How much are your products or services, and how do you justify that cost?
  • What are you selling, and what are your unique selling points (USPs)?
  • What channels will you use to reach customers?
  • Where will you sell your products? Will you deliver locally, nationally or internationally?

Logistics

This is where you set out your choice of suppliers, production timelines, shipping costs and lead-in times, facilities, inventory and any equipment you need to operate on day-to-day basis.

This section is particularly important if you’re going for a dropshipping approach to your online business, meaning you don’t own, store, or ship the products on your site yourself.

Bear in mind that while that makes life easier in the short term, as your brand gains traction you might run into issues with stock availability, which could cause significant delays and have a negative impact on the customer experience.

Financials

No matter where you are in your business journey, you need to know where every penny you spend is going and make sure you keep HMRC happy.

As you’re getting started, you’ll need to get to grips with things such as cash flow, profit margins, and forecasting. If you haven’t already, do some reading around cash flow projections to lay those financial foundations as soon as possible.

From day one, remember to keep digital records of everything you sell and spend. Once you have money coming in and out, invest in modern cloud accounting software to make life easier and free up valuable time which you’d otherwise spend catching up on financial admin.

Later down the line, you might decide to work with an accountant experienced in your industry to help you stay on top of your bookkeeping, plan your budgets, and make more informed business decisions.

Does my online store need a business plan?

Yes. Just like your brick-and-mortar counterparts, your e-commerce business needs a plan of action not only to get started, but to pave the way for sustainable long-term growth.

It doesn’t matter what stage your business is at – what matters is that you have a plan to keep you organised and focused.

Why do business plans fail?

Business plans tend to fail when they are not realistic.

That’s why we recommend talking to an accountant experienced in your chosen industry to make sure what you want to achieve is possible with the budget you have access to.

Another reason these plans fail is because some entrepreneurs think their plans are set in stone.

The reality is that you’re free to change direction and refine you plan at any stage. Think of it as a living plan, one that grows and develops as you learn more as an entrepreneur.

How do I start an e-commerce business plan?

Step one: download our awesome e-commerce business plan template.

Step two: fill it out using this article to guide you.

Step three: boss it.

What is the best e-commerce business plan template?

With 40 years’ experience of helping businesses succeed, Sage’s business plan guide and template has everything you need to boss your business. You’re not just downloading a template – you’re downloading decades of expert insight in bitesize form.

Your business plan is something you can keep coming back to and refine as you build your company and your experience grows.

Remember that this is more of a guide than something absolutely set in stone, so allow yourself to have that flexibility both in terms of timelines and the overall direction your business takes.

Get started today and good luck.

Business plan template for e-commerce companies

Want to create a business plan for your e-commerce company but not sure how to do it? Download our free and easy-to-use business plan template and you can get started.

Download your free business plan template

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